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China Can Turn its Challenges into Clear Opportunities for Greener Growth

This article first appeared in the South China Morning Post.

Confronted with a cooling economy and global headlines declaring an "Airpocalypse", China faces challenges on multiple fronts. While many people are quick to point out the hurdles, the reality is that its leaders are moving ahead with significant policy measures and reforms. If successful, these actions will not only help drive China's economic development, they will address another mounting threat: climate change.

The latest report from the Intergovernmental Panel on Climate Change confirms the risks of climate change and humans' central role in it. China is no less vulnerable. One-third of its coastline is highly vulnerable to rising seas that will probably lead to the relocation of coastal communities. China's agricultural production - including rice, wheat and corn - could fall dramatically within a few decades due to shifts in precipitation and soil quality. Health impacts, including malaria and other infectious diseases, are also expected to mount as global temperatures rise.

As China moves to tackle issues related to the economy, pollution and urbanisation, each carries opportunities to shift the country's emissions trajectory and make progress on climate change.

First, the economy. At the just-completed third plenum of the party's 18th Central Committee, China's economic reform was high on the agenda. The need to restructure the economy and adopt a new growth model for the coming decades is widely recognised. While major questions remain about the scope of reform, China's leaders identified the environment and innovation as two key areas to address.

As China's economy undergoes a transition, the country will benefit from this emphasis on innovation. This shift can be seen in the deployment of renewable- energy technologies that can drive growth and alter the country's emissions profile.

China is already the world's leading investor in clean energy, putting in more than US$65 billion last year. According to the latest report from the International Energy Agency, by 2035, China is expected to have built more renewable power plants than the US, European Union and Japan combined. China also has the largest installed wind capacity in the world and is working to update its power grid to match.

Moreover, China is investing heavily in research and development for clean energy and energy efficiency. Its 12th five-year plan included targets to increase R&D spending by focusing on seven priority industries, three of which - new energy, energy conservation and environmental protection, and clean vehicles - would contribute to low-carbon growth.

Second, China's massive air pollution problems, especially in cities, are well documented. Much of the pollution is associated with coal power that generates nearly 80 per cent of China's electricity. A new report by the China Meteorological Administration found that China has experienced more smoggy days this year than in any year since 1961. A global study published in The Lancet reported that ambient air pollution is the fourth leading cause of death in China.

Facing mounting public pressure, China's leaders have introduced measures to tackle pollution. This summer, China announced it would invest US$275 billion to improve air quality. The government recently declared a ban on new coal-fired power plants in three key population centres. It is also implementing mandatory energy efficiency upgrades and fuel switching; it is piloting carbon trading markets in seven regions, and; it has introduced a non-binding target to cap annual energy use at 4 billion tonnes of coal equivalent by 2015.

In responding to local air pollution, China's leaders can likewise make a dent in carbon dioxide emissions.

Third, China's urban transition is well under way. Premier Li Keqiang has noted the "huge potential" of urbanisation for economic growth. By 2030, 1 billion people - about two-thirds of China's population - are expected to live in cities, requiring as many as 50,000 new tall buildings. The stakes are high. The construction of new buildings and other infrastructure will lock in China's emission patterns for years to come.

In moving to a more urbanised society, China's leaders have plenty of reasons to embrace sustainable urban development. Well-designed cities offer cleaner air, shorter commutes and greater access to recreation and commerce. This, in turn, can attract top talent and lucrative industries. If done right, cities can reduce per capita energy use and emissions. These are important considerations as the National Development and Reform Commission is expected to announce its new 10-year urbanisation strategy.

For China's leaders, maintaining a robust economy is paramount. So is ensuring social stability. Further, as China focuses on economic growth, breathable air and vibrant cities, it can also shift to a lower-carbon pathway. Upcoming policy choices, including the development of the 13th five-year plan, will lay out a more comprehensive picture of the government's approach and reveal the country's priorities.

In developing on a more sustainable pathway, China's leaders could present a new global vision of development for a major emerging economy. Doing so would also be in the country's own interest.

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